Will Smith just dropped $10K on a startup that pitched him on Disrupt’s stage

Actor and Hollywood media mogul Will Smith surprised the TechCrunch Disrupt SF 2019 audience this afternoon by announcing he would invest $10K in a startup that pitched to him on stage as part of “elevator pitch” contest, where the winner would get to take a selfie with the star. The company, Socionado.com, helps companies with their social media presence. However, what got Smith’s attention was their well-delivered pitch, he said.

The startups didn’t get much time to prepare, having been plucked from the Startup Alley earlier in the day.

In addition to responding well to the pitch itself, Smith also liked the concept and the business model.

“As I built out my social media team, that was the idea — I wanted to take back my storytelling,” said Smith. “I think that’s hugely important.”

“That was really the best pitch so we’re gonna rock a selfie,” Smith said, jumping up to snap a photo with the founder.

Smith’s investment strategy isn’t usually this off-the-cuff, however.

Speaking on stage at the Disrupt conference, he also offered more details on his plans for Dreamers VC, the investment firm founded with Japanese soccer star, Keisuke Honda, which was announced last year by Honda’s management firm KSK Group.

Smith noted the firm has an interest in “doing good” with its funds — pointing, in particular, to an investment in “Boring tech.” (He actually means The Boring Company, per the Dreamers VC website, where it’s listed alongside a host of others.)

He also offered a little background on how Dreamers VC came to be in the first place.

“Well, you know, I met with [Keisuke Honda]  and we just hit it off immediately. And, you know, we felt like there was a beautiful intersection between being able to create businesses, but also to stay focused on solving problems of the world,” Smith explained. Honda already had banking relationships in Japan that were looking to make their way into the U.S.

“So the relationship worked out well,” he said.

Plus, Smith adds, “I had already been investing and he had already been in investing and our values were were in alignment. We want to solve some of the world’s problems. We want to do well by doing good.”

YouTube’s Neal Mohan describes the company’s efforts on safety and trust

YouTube Chief Product Officer Neal Mohan gave an update on all things YouTube at TechCrunch Disrupt SF. He touched on many different subjects, from YouTube Music updates to advertiser-friendly guidelines and tweaking YouTube’s recommendation algorithm.

Mohan started right away with an update on YouTube Music. YouTube has accidentally become one of the biggest music streaming services in the world. And the company plans to take advantage of that.

“Everybody knows music has been a core part of YouTube really since the day of the founding of the product,” he said.

While YouTube Premium started as YouTube Red, the company rebranded its premium subscription service with a focus on YouTube Music. "It's a music subscription service and it also brings the best of YouTube,” Mohan said.

It is now available in 71 different countries and YouTube is rolling out three personalized playlists today to make the service more competitive with Spotify and Apple Music.

With a renewed focus on YouTube Music, Google has decided to phase out Google Play Music to focus on YouTube Music instead. But there are still some missing features on YouTube Music.

In particular, YouTube is working on porting three Google Play Music features: The ability to have a locker with personal music files, the ability to play local audio files on your Android device and the ability to transfer your playlists from Google Play Music to the YouTube Music app.

“We'd like to do it in the near future and but we want to make sure we nail that,” Mohan said. So it’s still a work in progress.

Many YouTube creators have criticized the platform as some of their videos have been demonetized. Mohan mostly recapped some of YouTube’s efforts on this front to make sure that videos aren’t demonetized for no reason.

“In addition to our community guidelines, we also have something called the advertiser-friendly guidelines. Those are the sets of rules that govern what type of content is eligible for monetization and what is not,” Mohan said.

The company now has an appeal system so that creators can contest a demonetization decision. “There's an SLA turnaround time for processing that appeal,” Mohan said.

YouTube creators themselves can give advance warnings by saying what’s in a video, such as swear words, etc. Mohan believes that this model will make monetization more stable for YouTube creators.

When it comes to autoplaying videos, watch next and personalized recommendations, YouTube has also been criticized for recommending conspiracy videos or simply weird stuff that makes you uncomfortable.

“Lots of users are recommended content that you would call sort of more mainstream sometimes it’s in the other direction,” Mohan said. “And one thing that we want to avoid is sending users down paths to more and more extreme content, especially when that content might not be quite policy violations — so it still exists on our platform — but it's borderline in nature or maybe it's spreading you know harmful misinformation in some way or the other.”

YouTube started tweaking the recommendation algorithm back in January. Mohan says that there’s been a 50% reduction in user exposure to content “that we would deem to be in that bucket of sort of borderline or maybe harmful misinformation.”

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TechCrunch’s Matthew Panzarino and Neal Mohan also talked about Lilly Singh, a YouTube star who now has her own late night talk show on NBC — A Little Late with Lilly Singh.

“When they were looking for a replacement host for that late night show, it made sense,” Mohan said. “Lilly has this natural way of connecting with the audience. But also because the nature of a lot of that late night content in particular is that it's often viewed — not as it's linearly broadcasted on live channels — but the next day on YouTube.”

And Mohan doesn’t think she’s turning her back to YouTube. “She knows that her core audience, her most passionate fans are on YouTube,” he said.

Finally, Mohan had two pieces of advice for people working on subscription businesses. First, make sure that the message is clear and that people know why they should subscribe. Second, optimize the funnel from user acquisition to retention, monetization, etc.

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Daily Crunch: Zuckerberg is wrong about TikTok

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Zuckerberg misunderstands the huge threat of TikTok

In leaked audio of a Facebook all-hands meeting, Mark Zuckerberg described TikTok as “almost like the Explore Tab that we have on Instagram.” But Josh Constine argues that this is a serious misunderstanding of the app, which is more like a new form of social entertainment.

These distinctions matter because TikTok is a rapidly growing force in social media, a.k.a. a significant threat to Facebook and Instagram. And how can Zuckerberg beat what he doesn’t understand?

2. Microsoft’s latest Surface Laptop arrives in 13- and 15-inch models

Microsoft’s press event is currently underway as I write this newsletter, but it has already announced a new piece of hardware — the latest version of the Surface Laptop, with pricing starting at $999 for the 13-inch model.

3. Court says FCC’s ‘unhinged’ net neutrality repeal can’t stop state laws

The FCC’s repeal of net neutrality rules has been significantly weakened by a federal appeals court, which ruled that the Commission could not preempt state laws like those pending in California. In fact, one judge called the FCC’s logic “unhinged from the realities of modern broadband service.”

4. These are the top Y Combinator companies of all time, based on valuation

In October of 2018, Y Combinator published a mega list of the top 101 companies to have gone through the accelerator, as sorted by each company’s valuation. This morning they updated the list, with Airbnb and Stripe have swapping the top spots.

5. NASA launches a new planet-hunting telescope using a giant balloon

A new telescope will seek out planets that resemble Earth from a height of around 125,000 feet, using special optical technology that will filter out light from the stars they orbit to provide a better view.

6. Where top VCs are investing in edtech

New software, content and financing solutions for learning outside the traditional school system offer the more compelling business opportunities, particularly when it comes to vocational training. (Extra Crunch membership required.)

7. Streamlit launches open-source machine learning application development framework

Streamlit co-founder Adrien Treuille says that rather than building a one-size-fits-all machine learning tool, the key was developing a solution that was flexible enough to serve multiple requirements, depending on the nature of the data involved.

Zuckerberg misunderstands the huge threat of TikTok

“It’s almost like the Explore Tab that we have on Instagram” said Facebook CEO Mark Zuckerberg in leaked audio of him describing TikTok during an all-hands meeting. But it’s not. TikTok represents a new form of social entertainment that’s vastly different from the lifelogging of Instagram where you can just take a selfie, show something pretty, or pan around what you’re up to. TikToks are premeditated, storyboarded, and vastly different than the haphazard Stories on Insta.

That’s why Zuckerberg’s comments cast a dark shadow over the future of the Facebook family of apps. How can it beat what it doesn’t understand? He certainly can’t ignore it. Facebook’s copycat Lasso has been installed just 425,000 times since it launched in November, while TikTok has 640 million installs in the same period outside of China. Oh, and TikTok has 1.4 billion total installs beyond China to date.

TikTok Screenshots

TikTok

Casey Newton of The Verge today published two hours of audio and transcripts from two internal-only all-hands Q&As held by Zuckerberg at Facebook in July. His comments touch on the company’s plan to fight being broken up by regulators, especially if Elizabeth Warren becomes President. He thinks Facebook would win, but on resorting to suing the government, he says “does that still suck for us? Yeah.” Zuckerberg also describes how Facebook is working to launch a payments product in Mexico and elsewhere by year’s end as Libra deals with regulatory scrutiny.

But beyond his comments on regulation, it’s his pigeonholing of TikTok that’s most alarming. It foreshadows Facebook failing to win one of the core social feeds that its business depends on. Perhaps his perspective on the competitor is evolving, but the leak portrays him as thinking TikTok is just the next Snapchat Stories to destroy.

Zuckeberg’s Thoughts On TikTok

Here’s what Zuckerberg said about TikTok during the internal Q&A sessions, (emphasis mine):

So yeah. I mean, TikTok is doing well. One of the things that’s especially notable about TikTok is, for a while, the internet landscape was kind of a bunch of internet companies that were primarily American companies. And then there was this parallel universe of Chinese companies that pretty much only were offering their services in China. And we had Tencent who was trying to spread some of their services into Southeast Asia. Alibaba has spread a bunch of their payment services to Southeast Asia. Broadly, in terms of global expansion, that had been pretty limited, and TikTok, which is built by this company Beijing ByteDance, is really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world. It’s starting to do well in the US, especially with young folks. It’s growing really quickly in India. I think it’s past Instagram now in India in terms of scale. So yeah, it’s a very interesting phenomenon.

And the way that we kind of think about it is: it’s married short-form, immersive video with browse. So it’s almost like the Explore Tab that we have on Instagram, which is today primarily about feed posts and highlighting different feed posts. I kind of think about TikTok as if it were Explore for stories, and that were the whole app. And then you had creators who were specifically working on making that stuff. So we have a number of approaches that we’re going to take towards this, and we have a product called Lasso that’s a standalone app that we’re working on, trying to get product-market fit in countries like Mexico, is I think one of the first initial ones. We’re trying to first see if we can get it to work in countries where TikTok is not already big before we go and compete with TikTok in countries where they are big.

We’re taking a number of approaches with Instagram, including making it so that Explore is more focused on stories, which is increasingly becoming the primary way that people consume content on Instagram, as well as a couple of other things there. But yeah, I think that it’s not only one of the more interesting new phenomena and products that are growing. But in terms of the geopolitical implications of what they’re doing, I think it is quite interesting. I think we have time to learn and understand and get ahead of the trend. It is growing, but they’re spending a huge amount of money promoting it. What we’ve found is that their retention is actually not that strong after they stop advertising. So the space is still fairly nascent, and there’s time for us to kind of figure out what we want to do here. But I think this is a real thing. It’s good.

To Zuckerberg’s credit, he’s not dismissing the threat. He knows TikTok is popular. He knows it’s growing in key international markets Facebook and Instagram depend on to keep user counts rising. And he knows his company needs to respond via its standalone clone Lasso and more.

Facebook Lasso Screenshots

Lasso

But while TikToks might look like Stories because they’re vertical videos, and TikTok might algorithmically recommend them to people like Instagram Explore, it’s a whole ‘nother beast of a product and one that may be harder than it seems to copy.

To crystallize why, let’s rewind to Snapchat. With the launch of Stories, it started to blow up with US teens. Facebook’s attempts to clone it in standalone apps like Poke and Slingshot never gained traction. In fact, none of Facebook’s standalone apps have succeeded unless they splintered off an already-popular piece of Facebook like chat and users were forced to download them like Messenger. It wasn’t until Zuckerberg stuck his clone of Stories front-and-center atop Instagram and Facebook that Snapchat’s user count went from growing 18% per quarter to shrinking. There, Facebook used the same strategy laid out in Zuckerberg’s comments — push its good-enough clone in countries where the original isn’t popular yet.

But Facebook was fortunate because Stories really wasn’t that dissimilar to the content users were already sharing on Instagram — tiny biographical snippets of their lives. Snapchat CEO Evan Spiegel had originally invented Stories as a vision of Facebook’s News Feed through the lens of an ephemeral camera. All users had to know was “I take the same videos, but shorter and sillier, posted more often, and then they disappear”. The concept of Instagram and Facebook didn’t have to change. They were still about telling friends what you were up to. Choking off TikTok’s growth will be much more complicated.

Why TikTok Is Tough To Clone

TikTok isn’t about you or what you’re doing. It’s about entertaining your audience. It’s not spontaneous chronicling of your real life. It’s about inventing characters, dressing up as someone else, and acting out jokes. It’s not about privacy and friends, but strutting on the world stage. And it’s not about originality — the heart of Instagram. TikTok is about remixing culture — taking the audio from someone else’s clip and reimagining the gag in a new context by layering it atop a video you record.

TikTok Remixes

That makes TikTok distinct enough that it will be very difficult to shoehorn into Instagram or Facebook, even if they add the remixing functionality. Most videos on those apps aren’t designed to be templates for memes like TikToks are. Insta and Facebook’s social graphs are rooted in friendship and augmented by the beautiful and famous, but don’t encompass the new wave of amateur performers TikTok elevates. And since each post to the app becomes fodder for someone else’s creativity, a competitor starting from scratch doesn’t offer much to remix.

That means a TikTok clone would have to be somewhat buried in Instagram or Facebook, rebuild a new social graph, and retrain users’ understanding of these apps’ purpose…at the risk of distracting from their core use cases. This leaves Facebook hoping to grow its standalone TikTok clone Lasso which TechCrunch scooped a year ago before it launched last November. But as we’ve seen, Facebook struggles growing brand new apps, and that effort is further hindered by its increasingly toxic brand and sheen of uncoolness. Nor does it help that Facebook must divert development resources to comply with all the new privacy and transparency obligations as part of its $5 billion FTC fine and settlement.

The Next Feed

Facebook’s best bet is to assess the future value of the ads it could run on a successful TikTok clone and apply some greater fraction of that grand sum to competing directly. It’s already made some smart additions to Lasso like tutorials for how to remix and the option to add GIFs as sections of your video. But it’s still failing to gain serious traction in the US. While typical TikTok homepage videos have hundreds of thousands of Likes, the top ones I saw in my Lasso feed today received 70 or fewer.

I had Sensor Tower run some analysis comparing TikTok with Lasso since its launch last November, and found that Lasso gets 6 downloads for every 1000 for TikTok in the US. Some more stats:

  • US Total Downloads Since November: Lasso – 250,000 // TikTok – 41.3 million
  • US Downloads Per Day Since November: Lasso – 760 // TikTok – 126,000
  • Average US Google Play Social App Chart Ranking: Lasso – #155 // TikTok – #2

Beyond the US, Lasso has only launched in one other market, Mexico in April, where it’s been faring better but could hardly even be considered a competitor to TikTok. They won’t even coherently fit together on a graph. Facebook needs to lean harder into Lasso:

  • Mexico Total Downloads Since April: Lasso – 175,000 // TikTok – 3.3 million
  • Mexico Downloads Per Day Since November: Lasso – 1,000 // TikTok – 19,000

Facebook Lasso Logo

Zuckerberg may need to find a coherent place for TikTok style features inside Instagram and potentially Facebook. That could be another horizontal row of previews like with Stories and/or a header on the Explore page dedicated to premeditated content. Certainly something more prominent than a single button like IGTV that still no one is asking for. One opportunity to best TikTok would be building a dedicated remix source browser into the Stories camera to help users find content to put their own spin on.

Facebook will also need to buy out top TikTok creators to make videos for it instead, and even quasi-hire some of the most prolific video meme or challenge inventors to give users trends to jump on rather than just one-off clips to watch. Its failure to offer IGTV stars monetization has led many to ignore that platform, and it can’t afford that again.

If Zuckerberg approaches TikTok as merely an algorithmic video recommender like Explore, Facebook will miss out on owning the social entertainment feed. If he doesn’t decisively move to challenge TikTok soon, its catalog of content to remix will grow insurmountable and it will own the whole concept of short form performative video. Snapchat’s insistence on ephemerality makes it incompatible with remixing, and YouTube isn’t nimble enough to reinvent itself.

If no American company can step up, we could see our interest data, faces, and attention forfeited to an app that while delightful to use, heralds Chinese political values at odds with our own.

Twitter launches its anti-abuse filter for Direct Messages

Twitter is rolling out its spam and abuse filter for Direct Messages, a month and a half after the company announced it had started testing the feature. The filter will be available on Twitter’s iOS, Android and Web apps.

The filter adds a new view to the Additional Messages inbox, where DMs from people you don’t follow go. If you click on it, messages that potentially contain offensive content also have their previews hidden, with an option to delete the message without opening it first.

The new DM filter is useful for people who want to keep their Twitter messages open, but (like most people) don’t want to see abusive content. The feature, however, feels long overdue considering that offensive messages are so common for users with open inboxes that third-party developers have launched their own filtering tools, including a recently-released plugin that detects and deletes dick pics.

Earlier this month, Twitter also released its Hide Replies feature in the U.S. and Canada after testing it in Canada. It gives users the option of picking replies to a tweet to hide, but does not delete them. Instead, they are still visible in a separate view that is linked to a button in the original tweet.

Daily Crunch: Facebook faces VR challenges

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Not all is predictable on Facebook’s social Horizon

Last week, Facebook unveiled Horizon, a massively multiplayer VR world that’s scheduled to launch in 2020. This might seem to play to Facebook’s software strengths, but Lucas Matney argues that the social networking giant may not actually have much of an advantage against smaller game studios.

For example, the team at Against Gravity has already built a network inside VR called Rec Room that’s been maturing over the past few years, with rich environments and toolsets for multiplayer interactions. (Extra Crunch membership required.)

2. Spotify now lets you add podcasts to playlists

Users can create their own custom playlists of their favorite podcasts, or even those that combine music and audio — similar to Spotify’s newly launched playlist “Your Daily Drive.”

3. Kickstarter darling EcoFlow Delta battery generator is not what it seems

The EcoFlow Delta is a new battery generator available on Kickstarter with incredible features claimed. Most are true, some are not.

4. YouTube TV is now available on Fire TV devices

Earlier this year, Google and Amazon reached an agreement to bring their streaming video apps to each other’s platforms. The YouTube app launched on Fire TV in July, and now Google is adding its live TV streaming service.

5. Amboss, the knowledge platform for medical professionals, scores €30M Series B

Launched in 2014 as a study platform for medical students, Amboss has since evolved to offer what it claims is the “most comprehensive and technologically-advanced” knowledge platform for medical professionals.

6. Learn everything you can about mobility at Disrupt SF

We’re bringing some of the industry’s leaders onstage at Disrupt SF — including Bird founder and CEO Travis VanderZanden, Kitty Hawk CEO Sebastian Thrun and Zoox CEO Aicha Evans.

7. This week’s TechCrunch podcasts

The latest episode of Equity kicks off with the reemergence of the much-criticized startup Bodega, which is now known as Stockwell and has raised a total of $45 million in funding. Meanwhile, Original Content reviews “Between Two Ferns: The Movie” on Netflix.

Instagram launches a ‘creators’ account to encourage more… creation

Instagram deployed a new tool today that should help it continue to build a more viable alternative to YouTube for individual creators looking to try a different platform. It’s a dedicated account called @creators, which will deliver tips and tricks for people hoping to become more active on the platform.

Based on the pinned FAQ story that Instagram has posted to the account, and a brief explainer with some testimonials from actual creators using the platform. Some of the questions that Instagram answers include how to get Verified, which must be asked so incredibly frequently by this particular set of folks.

The grid posts of @creators include some helpful tips like pointing out that 60% of people listen to stories on the platform with the sound on. Clearly, the account is geared towards pushing video creation tips and tools, which makes sense given that’s an area of growth for the company, and a way for it to win over disaffected YouTubers and younger creators who are looking for their new home on the web.

This could be a huge potential opportunity for Instagram, in fact, and this account, while a small part of an overall approach to wooing creators, is a good one.

SmartNews’ head of product on how the news discovery app wants to free readers from filter bubbles

Since launching in the United States five years ago, SmartNews, the news aggregation app that recently hit unicorn status, has quietly built a reputation for presenting reliable information from a wide range of publishers. The company straddles two very different markets: the U.S. and its home country of Japan, where it is one of the leading news apps.

SmartNews wants readers to see it as a way to break out of their filter bubbles, says Jeannie Yang, its senior vice president of product, especially as the American presidential election heats up. For example, it recently launched a feature, called “News From All Sides,” that lets people see how media outlets from across the political spectrum are covering a specific topic.

The app is driven by machine-learning algorithms, but it also has an editorial team led by Rich Jaroslovsky, the first managing editor of WSJ.com and founder of the Online News Association. One of SmartNews’ goal is to surface news that its users might not seek out on their own, but it must balance that with audience retention in a market that is crowded with many ways to consume content online, including competing news aggregation apps, Facebook and Google Search.

In a wide-ranging interview with Extra Crunch, Yang talked about SmartNews’ place in the media ecosystem, creating recommendation algorithms that don’t reinforce biases, the difference between its Japanese and American users and the challenges of presenting political news in a highly polarized environment.

Catherine Shu: One of the reasons why SmartNews is interesting is because there are a lot of news aggregation apps in America, but there hasn’t been one huge breakout app like SmartNews is in Japan or Toutiao in China. But at the same time, there are obviously a lot of issues in the publishing and news industry in the United States that a good dominant news app might be able to help, ranging from monetization to fake news.

Jeannie Yang: I think that’s definitely a challenge for everybody in the U.S. With SmartNews, we really want to see how we can help create a healthier media ecosystem and actually have publishers thrive as well. SmartNews has such respect for the publishers and the industry and we want to be good partners, but also really understand the challenges of the business model, as well as the challenges for users and thinking of how we can create a healthier ecosystem.

This Week in Apps: AltStore, acquisitions and Google Play Pass

The app industry shows no signs of slowing down, with 194 billion downloads in 2018 and over $100 billion in consumer spending. People spend 90% of their mobile time in apps and more time using their mobile devices than watching TV. In other words, apps aren’t just a way to spend idle hours — they’re a big business. And one that often seems to change overnight. In this new Extra Crunch series, we’ll help you keep up with the latest news from the world of apps — including everything from the OS’s to the apps that run upon them, as well as the money that flows through it all.

This week, alternatives to the traditional app store is a big theme. Not only has a new, jailbreak-free iOS marketplace called AltStore just popped up, we’ve also got both Apple and Google ramping up their own subscription-based collections of premium apps and games.

Meanwhile, the way brands and publishers want to track their apps’ success is changing, too. And App Annie — the company that was the first to start selling pickaxes for the App Store gold rush — is responding with an acquisition that will help app publishers better understand the return on investment for their app businesses.

Headlines

AltStore is an alternative App Store that doesn’t need a jailbreak

An interesting alternative app marketplace has appeared on the scene, allowing a way for developers to distribute iOS apps outside the official App Store, reports Engadget — without jailbreaking, which can be difficult and has various security implications. Instead, the new store works by tricking your device into thinking you’re a developer sideloading apps. And it uses a companion app on your Mac or PC to re-sign the apps every 7 days via iTunes WiFi syncing protocol. Already, it’s offering a Nintendo emulator and other games, says The Verge. And Apple is probably already working on a way to shut this down. For now, it’s live at Altstore.io.

For the third time in a month, Google mass-deleted Android apps from a big Chinese developer.

Does Google Play have a malicious app problem? That appears to be the case as Google has booted some 46 apps from major Chinese mobile developer iHandy out of its app store, BuzzFeed reported. And it isn’t saying why. The move follows Google’s ban of two other major Chinese app developers, DO Global and CooTek, who had 1 billion total downloads.

Google Firebase gets new tools

Not all is predictable on Facebook’s social Horizon

Most of the people I spoke with at Facebook’s Oculus Connect see the proliferation of virtual reality as a foregone conclusion, one that’s just a matter of timing at this point. For Facebook, the conference’s “The Time is Now” catchphrase showcased that they feel their hardware is ready for everyone.

But despite the success, they feel like they’ve tapped into when it comes to hardware iterations, the company’s bread and butter social networking prowess feels like it’s barely improved in-headset in the past several years of VR experimentations.

“On the social side, looking back, it’s kind of embarrassing all of the stages we’ve gone through at Oculus,” Oculus CTO and veteran programmer John Carmack conceded onstage during his signature rambling annual keynote, noting that his own social APK was followed by Oculus Rooms, Oculus Venues, Facebook Spaces and now the company’s latest shiny pearl Facebook Horizon.

Horizon’s debut this year included a flashy trailer for what quickly seemed to be the company’s biggest gamble and first potential social hit, a massive multi-player online world. In introducing the software, Zuckerberg talked about people-centric software as Facebook’s “bread-and-butter,” noting, “We build a lot of the best social experiences for phones and computers, and we want to do this for virtual reality as well.”

But Facebook does not actually appear to hold that much of an advantage over much smaller game studios in terms of understanding how to make social virtual reality experience take off.